G7 and BRICS square off in great power rivalries

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news there are meetings underway by two powerful economic groupings today - the G7 and the BRICS countries.</p><p>The G7 has about twice the economic activity of the BRICS countries, and the BRICS are in a bit of a rut at present, which is unusual for them. The BRICS are meeting 'virtually' and India seems to be a weak link, also meeting on the sidelines with the G7. It is noticeable that the G7 is active while the BRICS are defensive.</p><p>The G7 are about to roll out an extended set of sanctions on the invading Russians, including around gold transfers, insurance, and the oil price. A number of BRICS members (like China) could be boxed in by these moves. The G7 leaders morph into NATO leaders in a few days later.</p><p>The annual inflation rate in Japan was at <a href="https://www.e-stat.go.jp/en/stat-search/files?page=1&layout=datalist&toukei=00200573&tstat=000001150147&cycle=1&year=20220&month=12040605&tclass1=000001150149&result_back=1&tclass2val=0" target="_blank"><strong>+2.5% in May</strong></a>, unchanged from April's 7½-year high but in line with market expectations. This was also their 9th straight month of rising consumer prices, with food inflation hitting its highest in over 7 years, now topping +4%. The Bank of Japan has shown no signs of changing course from its ultra-easy money policies designed to raise inflation, but some sort of change must be getting closer.</p><p>Meanwhile, very hot temperatures are causing concern over how to keep the electricity system from suffering <a href="https://asia.nikkei.com/Business/Energy/Japan-issues-power-usage-warning-for-Tokyo-area-amid-heat-waves" target="_blank"><strong>blackouts</strong></a>, especially in the Tokyo area.</p><p>In China, the sluggish economy is really putting <a href="https://www.sixthtone.com/news/101